The week’s news included; UK Autumn budget summarised, Amazon signs deal to host UK spy agency data, Tesla joins the $1 trillion club as Elon Musk’s net worth passes $300bn, Twitter posts $500m loss.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram Page, for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- Legal Cheek – 49 tips candidates need to know before starting as a trainee solicitor.
- BBC News – Why the vending machine is making a comeback
- LawCareers.net – Has the pandemic irrevocably changed the nature of work and the employment relationship in the UK?
- City A.M. – A new dawn of cryptocurrency is forcing us to re-evaluate our faith in our institutions of state.
1. UK AUTUMN BUDGET
UK Chancellor Rishi Sunak unveiled the autumn budget outlining fiscal policy for the coming year. The budget comes against the backdrop of good economic news. It is expected that the UK economy is expected to reach pre-Covid levels by the end of 2021 and will grow a further 6% next year. Here is a summary of some of the key points from the budget;
- From April, leisure and entertainment venues will be able to claim a 50% discount on their business rates up to £110,000. Plans to increase rates for all businesses have been scrapped.
- The National Living wage will increase 6.6% to £9.50 per hour. This covers adults over the age of 23. The National Minimum wages for apprentices and those aged 22 and under are also increasing.
- Spending on healthcare will increase by £44 billion over the next 3 years, creating the healthcare largest budget since the Conservative government came into power in 2010. This will see 50,000 more nurses, 50 million more primary appointments and £4.8 billion going to local governments for social care.
- The Health and Social care levy will go ahead as planned which will see a 1.25% increase in National Insurance.
- The government pledged £11.5 billion to build 180,000 new affordable homes.
- Fuel duty has been frozen at 58p for 10 years to help combat the rising cost of living. Currently, about 60% of the cost of fuel is a combination of fuel duty and VAT.
For more on the budget announcements check out Sky News’ summary here.
2. FACEBOOK CHANGES NAME
Facebook has officially changed its corporate name to “Meta” to reflect its new ventures. The tech giant is branching out into the “metaverse”. The metaverse is a digital world where people can interact in a 3D environment. For example, Facebook revealed an app where people can hold meetings in virtual reality. The metaverse has not been created and the development of the technology is still in a very nascent stage.
Only Facebook’s corporate name will change. Its platforms: Facebook, WhatsApp and Instagram will not see any changes to their names. Facebook’s move seems similar to Google’s name change to Alphabet in 2015.
The tech giant also took a hit last week as leaked documents from an ex-employee highlighted a myriad of issues. Namely, documents showing that Facebook withheld details about vaccine misinformation from lawmakers during the pandemic. Also, the tech giant withheld research that found that Instagram harmed the mental health of teenagers. Facebook CEO Mark Zuckerberg denied wrongdoing and claimed that the leaked documents aimed to “paint a false picture” of the company. In spite of the news, Facebook unveiled a huge $9 billion in profit for the third quarter, beating estimates. The tech giant’s enormous user-base further increased 6% to 2.91 billion.
3. AMAZON SIGNS UK SPY DEAL
Amazon has reportedly secured a £1 billion deal to provide cloud hosting services for the UK’s spy agencies. This will see Amazon Web Services (AWS) host the UK’s most classified information of MI5, MI6, Ministry of Defence and other governmental departments. All data will be held in Britain but understandably, no further details have been revealed by the UK’s spy agency GCHQ. The deal is estimated to be worth between £500 million and £1 billion. UK Home Secretary, Priti Patel, has however, faced calls to explain her decision to award the contract to Amazon. The shadow security minister wanted to confirm whether relevant security implications had been fully considered or whether the national security council had been consulted on the matter. There are concerns about non-UK based companies holding such sensitive data. Cybersecurity experts have urged parliament to scrutinise the arrangement to ensure such privacy concerns are addressed.
4. TESLA JOINS $1 TRILLION CLUB
Tesla has joined the illustrious $1 trillion club as its market value surpassed this threshold last week. It joins Apple, Microsoft, Amazon and Alphabet as the only US public companies above this threshold. Tesla is still a way off the leaders as Microsoft leapfrogged Apple to become the world’s most valuable company last week, reaching a staggering $2.49 trillion valuation.
Tesla’s achievement is, however, no less spectacular. The electric car maker signed a deal with car rental firm Hertz which will see them purchase 100,000 Tesla Model 3s for a huge $4.2 billion. This news sent Tesla shares soaring 12.6%. The electric car maker is now worth as much as the next nine largest car manufacturers combined. Toyota, its nearer competitor in market value stands at just $287 billion. This deal with Hertz is a huge vote of confidence in Tesla’s vision despite the glaring lack of electric vehicle infrastructure, such as charging points, in the US. Deals such Hertz and Tesla’s help the case for greater investment by the government by creating increased demand for this infrastructure. Biden has already pledged to spend billions on electric infrastructure over the coming years.
Elon Musk’s 23% stake in Tesla has meant his personal net worth surpassed a staggering $300 billion due to this rally. He has become the first person in history to cross this mark and is wealthier than the country of Pakistan.
Morrisons could face a new regulatory hurdle to its recently agreed £7 billion takeover from Clayton Dubilier Rice (CD&R). The Competition and Markets Authority (CMA) issued an initial enforcement order prohibiting CD&R from integrating Morrisons into its other businesses. CD&R owns petrol station company MFG which has 900 stations across the UK. MFG operates over 10% of petrol stations in the UK. Morrisons has a modest 300 petrol stations linked with its stores, but this has still raised concerns.
The CMA is considering whether to launch an investigation into the takeover and no formal announcement has been made. If the CMA sees potential harm to competition, Morrisons could be forced to sell off some petrol forecourts for the deal to go through. Asda faced similar issues as the Issa Brothers’ EG Group was forced to sell off 27 petrol stations to receive CMA approval for their £6.8 billion takeover of Asda.
Despite this, Morrisons withdrew from the London Stock Exchange last week, in anticipation of the merger. This ends the supermarket’s 54 years on the exchange.
6. VOLVO IPO
Swedish automaker Volvo launched its IPO last week and reached a $22 billion valuation. Volvo shares jumped by 22% on the day, making it Europe’s largest IPO of the year. Volvo is owned by Chinese holding group Zhejiang Geely and it will remain as the largest shareholder of the automaker post-listing.
The automaker is making a huge leap into electric vehicles and the funds raised from the IPO will help realise this ambition. Volvo plans to have a fully electric fleet by 2030 and aims to sell 600,000 electric vehicles by 2025. Its new electric batteries due to be available from 2025 will have a range of up to 625 miles and have rapid charging times.
7. TOYS “R” US RETURNS
Toys “R” Us is returning to the UK nearly four years after its dramatic collapse. In 2018, the store fell into administration due to changing consumer trends. It had far too many large costly outlets with insufficient footfall. It could not find a buyer for its UK business and was forced to close. The chain however, remained buoyant in Asia and Canada. The group still boasts 900 stores and e-commerce sites and turned over $2 billion last year. Last week, the chain’s parent firm announced that a long-term license agreement had been agreed to run “digital and physical retail commerce” in the UK. At this stage, it is not clear whether any stores will open but a plan to start online sales has been devised. The UK has the largest toy market in Europe and the fourth largest market in the world.
8. TESCO SIGNS GORILLAS DEAL
Tesco has signed a deal with rapid delivery firm Gorillas which will allow customers to receive groceries in just 10 minutes. The scheme is being piloted at five large Tesco stores in the UK. Tesco products can be purchased on the Gorillas app then will be picked, packed and delivered to customers within 10 minutes. The standard delivery charge for Gorillas is just £1.80.
This deal has undoubtedly been spurred by the pandemic where Tesco was overwhelmed with online delivery orders. Although numbers are a far cry from the peak of the pandemic, more customers are using online delivery to buy their groceries. Tesco already delivers to the majority of the UK, but customers often have to wait for delivery slots. The addition of rapid delivery will provide a new convenient service for Tesco customers.
9. IKEA BUYS FLAGSHIP LONDON BUILDING
Ikea has purchased Topshop’s former Oxford Street building for £378 million. The Swedish homeware giant will obtain the seven-storey building with 239,000 sq ft of retail and office space. In addition, NikeTown and Vans will have outlets within the building.
The decision to purchase the Oxford Street site raised many eyebrows. Ikea is known for operating outside of city centres allowing customers to easily transport their often-large purchases using their cars or vans. This latest purchase however, forms part of Ikea’s strategy to open inner-city stores across Europe. Ikea’s Oxford Street store will be focused on home furnishing accessories and customers will largely be expected to buy products for home delivery. This follows successful trials of inner city stores in Paris, Madrid and New York. The Oxford Street store is expected to open within the next 2 years.
10. TWITTER POSTS HALF A BILLION LOSS
Twitter has posted a huge $537 million loss in the third quarter after settling a long-running lawsuit. The social media giant paid out $809.5 million to investors for allegedly misleading them over active user numbers and user engagement in 2015. Twitter did not accept or deny any wrongdoing but paid the settlement taking them into the red. On the positive side, revenue grew 37% in the quarter.
Earlier this year, Apple introduced new privacy measures preventing advertisers from tracking iPhone users without consent. This had eaten away at many revenues who relied on targeted ads such as Snapchat. Snapchats owner Snap, missed revenue expectations and warned Q4 earnings would also be affected. Twitter was largely able to shrug off the change and pulled in $1.14 billion in advertising revenue.